The Federal Reserve meeting takes place on Tuesday-Wednesday. The Fed is pivoting toward interest-rate cuts in 2024, but when will that start?
Markets see virtually no chance of a Fed rate cut on Jan. 31, with a March 20 cut a tossup. Investors also are split on whether the Fed will cut five or six times for the year.
Fed Rate-Cut Odds
Jan. 31: 2.1% chance of a quarter-point Fed rate cut.
March 20: 47.4% chance of a quarter-point Federal Reserve rate cut.
May 1: 88.4% chance of quarter-point cut by this time, 37.2% chance of cumulative 50 basis points cut.
For the full year, markets see an 86.2% chance of 125 basis points worth of easing, or five quarter-point cuts. There's a 54.5% chance of 150 basis points of cuts.
Needless to say, nothing is locked in.
The Fed statement and Fed Chief Jerome Powell's post-meeting press conference will have a big influence on rate-cut odds.
The past week saw a near-perfect mix of strong economic data and slowing inflation at or below the Federal Reserve's 2% target. This coming week will see a slew of reports, including November job openings on Tuesday, the Q4 Employment Cost Index on Wednesday, the December ISM manufacturing index on Thursday and the December jobs report on Friday.
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